Cryptocurrencies have been underperforming due to stable sales and a decrease in risk appetite. Although macro developments play a part, the disinterest in cryptocurrencies is notably significant. This situation leads to concerns about the prospects of cryptocurrencies. One puzzling aspect is the loss of South Korean investors, traditionally among the most enthusiastic buyers.
South Korea and Cryptocurrencies
During Asian market openings, if the sentiment was positive overnight, we would witness interesting volatility spurred by South Korean investors. This topic was specifically addressed by TechFlow and WuBlockchain, questioning where these enthusiastic South Korean buyers have gone.
We’ve been discussing the Coinbase Premium for a long time, and similarly, there’s a term invented for Korea – the Kimchi Premium. This indicated the eagerness of Asian investors, sometimes evident in indicators reaching up to 10% during peak times. It showed that investors were willing to pay 10% above global exchange prices for Bitcoin.
However, this year saw a drastic change. Upbit, South Korea’s largest cryptocurrency exchange, experienced an approximately 80% decrease in trading volume compared to the previous year. The BTC/KRW pair is not as active as it used to be. Moreover, listings on South Korean exchanges don’t generate the same excitement in global markets as they once did.
Meanwhile, the South Korean stock markets are thriving. The KOSPI index increased by 70% this year, reaching new records. Sources in the region say that South Korean investors are now more focused on artificial intelligence and semiconductor stocks.
Back on December 3, when martial law was declared in Korea, traffic surged tenfold and volume jumped to $27.5 billion. It was after reaching this peak that South Korean exchanges began to lose strength.
Investors Move from Crypto to Stocks
There was a large group of investors that, being particularly eager in altcoins, made hefty profits, pushing low-market-cap altcoins up. The altcoin meltdown this year might strongly relate to the exit of South Korean investors. Prolonged lack of expected returns in altcoins seems to have prompted a shift to equities.
In search of less risky investments with more enticing upswing potential, many have turned to stocks. For instance, the KOSPI index jumped 21% last month alone, achieving its best monthly performance since 2001. Its gains throughout 2025 stood at 72%, surpassing almost all asset classes.
Bitcoin, too, faced challenges; while most altcoins saw a 72% drop this year, South Koreans seem to have initially made a prudent choice. If altcoin markets rebound, our Asian friends might also return to them. Presently, substantial gains from companies like Samsung Electronics and SK hynix please the investors.
Artificial Intelligence and South Korea
The global tech bubble ignited with GPT at the end of 2022 continues to expand. South Korea ranks highly among countries monetizing from this sector. Firms such as SK hynix and Samsung Electronics dominate the HBM (high bandwidth memory) market. Although the U.S. may be the hub of AI, significant funds flow to South Korea.
Investing in South Korean firms has become more appealing than hoping for a 10x return from any altcoin. This is not only a financial motivation but also driven by national pride. At the end of October, SK hynix reported third-quarter revenues of $17.1 billion and operating profits of $8 billion.